{"id":15959,"date":"2022-12-30T01:54:28","date_gmt":"2022-12-30T01:54:28","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/nobel-prize-laureate-paul-krugman-compares-tesla-to-bitcoin-they-have-more-in-common-than-you-think-featured-bitcoin-news\/"},"modified":"2022-12-30T01:54:28","modified_gmt":"2022-12-30T01:54:28","slug":"nobel-prize-laureate-paul-krugman-compares-tesla-to-bitcoin-they-have-more-in-common-than-you-think-featured-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/nobel-prize-laureate-paul-krugman-compares-tesla-to-bitcoin-they-have-more-in-common-than-you-think-featured-bitcoin-news\/","title":{"rendered":"Nobel Prize Laureate Paul Krugman Compares Tesla to Bitcoin \u2014 They ‘Have More in Common Than You Think’ \u2013 Featured Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Nobel Prize-winning economist Paul Krugman says Tesla may have more in common with bitcoin than you think. He explained that Tesla sales have depended in part on the perception that CEO Elon Musk \u201cis a cool guy\u201d while the price of bitcoin is \u201cbeing sustained by a hard-core group of true believers.\u201d
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Paul Krugman Compares Tesla to Bitcoin<\/h2>\n

Paul Krugman, who won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2008 for his analysis of trade patterns and location of economic activity, published an opinion piece in the New York Times Tuesday about Tesla, bitcoin, and their huge valuations. He wrote:<\/p>\n

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Tesla and bitcoin may have more in common than you think.<\/p>\n<\/blockquote>\n

The economist explained that mega-corporations like Apple, Microsoft, and Amazon have maintained their dominance because these companies \u201cbenefit from strong network externalities \u2014 loosely speaking, everyone uses their products because everyone else uses their products.\u201d<\/p>\n

However, \u201cIt\u2019s hard to see what would give Tesla a long-term lock on the electric vehicle business,\u201d Krugman described. \u201cWhere are the powerful network externalities in the electric vehicle business?\u201d he questioned, emphasizing: \u201cElectric vehicle production just doesn\u2019t look like a network externality business.\u201d<\/p>\n

Krugman continued:<\/p>\n

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It\u2019s hard to explain the huge valuation the market put on Tesla before the [price] drop, or even its current value.<\/p>\n<\/blockquote>\n

The Nobel Prize laureate proceeded to explain \u201cwhy Tesla was ever worth so much.\u201d He believes that it\u2019s because \u201cinvestors fell in love with a storyline about a brilliant, cool innovator, despite the absence of a good argument about how this guy, even if he really was who he appeared to be, could found a long-lived money machine.\u201d Krugman added: \u201cTesla sales have surely depended at least in part on the perception that Musk himself is a cool guy.\u201d<\/p>\n

Describing a parallel between Tesla and bitcoin, the Nobel Prize-winning economist detailed:<\/p>\n

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Despite years of effort, nobody has yet managed to find any serious use for cryptocurrency other than money laundering. But prices nonetheless soared on the hype, and are still being sustained by a hard-core group of true believers.<\/p>\n<\/blockquote>\n

\u201cSomething similar surely happened with Tesla, even though the company does actually make useful things,\u201d Krugman concluded.<\/p>\n

At the time of writing, Tesla\u2019s stock has fallen 70% year-to-date while bitcoin\u2019s price has dropped 65% during the same time period.<\/p>\n

Do you agree with Paul Krugman about Tesla and bitcoin? Let us know in the comments section below.<\/strong><\/em><\/p>\n

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\nKevin Helms <\/h6>\n

\nA student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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